Recent investments in 11 GW of new coal power generation capacity may result in a reduction in operating cash flow of $71 billion. According to the Carbon Tracker Institute, this will happen because, despite the current high cost of renewable energy, Japan's solar and wind energy will be cheaper than coal by 2025 at the latest.

Even in Japan, the price of solar and wind energy declines longer than other mature PV markets, but the continued decline in renewable energy costs will offset new coal investments by 2025 at the latest.

The coal facility developed a project financing model that shows how assets can quickly become unprofitable for three different lengths of time, and how the assets will suffer in the worst case fossil fuels. The reduced cash flow totaled $71 billion. The authors of the report said that if the Japanese government rethinks the investment in new coal-fired power plants, it can avoid about $29 billion. The study also highlighted that 42% of the global coal fleet may become unprofitable in 2018, and this percentage may rise to around 72% by 2040.

It is predicted that by 2023, the average energy cost (LCOE) generated by solar power generation may be cheaper than that of new coal-fired facilities. Offshore wind power is expected to reach this level by 2022, and by 2025, onshore wind power will achieve this feat.

It is predicted that by 2025, the LCOE of solar and offshore wind energy will be lower than the long-term marginal cost of existing coal-fired power plants, which cost less than the investment in the new plan. - Cost power and tomorrow's financial liabilities," the report said. "Japan's planned and operational coal capacity is partially protected by regulations that give coal-fired generators an unfair advantage in the market. ”

The design of Japan's base load power market, which also includes the cost of sealed nuclear facilities, may protect coal asset owners from future carbon prices. Similar to France, this market's scheduling mechanism places nuclear energy on top of solar and wind energy. The study said that this situation may lead to further reductions in renewable energy. The report said: "If there is no policy reform, Japanese consumers may not be able to obtain the lowest cost electricity."

The study recognizes that Japan's renewable energy costs rank first in the world, but concludes that Japan's coal era is coming to an end. In the first four solar auctions held by the Japanese government, the price of electricity generated by large-scale solar projects fell from an average of 19.6 yen/kWh ($0.18) to 12.98 yen in the latest tender.

According to the latest statistics released by the International Renewable Energy Agency, Japan's cumulative solar power generation was 55.5 GW by the end of last year, including the addition of 6 GW facilities in 2018. The latest report from Tokyo research firm RTS Corp shows that the country says it could reach 150 GW by 2030.

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